Afghanistan-Pakistan transit trade crashes to USD 367 million as Kabul shifts routes

Afghanistan's transit trade through Pakistan has fallen sharply as Kabul shifts cargo to Iranian routes. The decline predates Pakistan's 2025 border closure and is hurting border economies on both sides.Image used for representational purposes onlyAfghanistan-Pakistan transit trade fell sharply to USD 367 million in the outgoing fiscal year, down from USD 5 billion in 2021, according to a media report. Dawn reported on Sunday that the trade dropped to 11,592 containers in FY-26, marking one of the steepest declines in recent years.The report said the fall came as Kabul increasingly turned to Iranian routes and reduced its reliance on Pakistani ports. Pakistan's closure of its border with Afghanistan in October 2025 over security concerns affected transit trade to some extent, but the data showed that the downward trend had started well before those restrictions were imposed.Transit traffic had risen from about 60,500 containers in FY-17 to nearly 89,000 containers worth USD 5 billion in FY-21, just before the Taliban returned to power. This growth took place despite strained political ties between Pakistan and the former Afghan government led by Ashraf Ghani. According to Dawn, Kabul continued to use Pakistani ports as its main route for international trade and did not discourage importers from using them, possibly to help Afghan businesses bring in essential goods at lower transport costs and limit inflationary pressure in an economy heavily dependent on imports.After the Taliban returned to power, transit cargo through Pakistan initially recovered. Container traffic rose to 1,02,886 and cargo value reached USD 6.7 billion in FY-23. But the volumes then fell to 54,114 containers in FY-24 and 42,959 containers worth USD 1.36 billion in FY-25, well before Pakistan shut the border in October 2025. Trade analysts told Dawn that the border closure did not begin Kabul's search for alternative routes, but instead reflected a strategy already under way by the Afghan Taliban to cut Afghanistan's dependence on Pakistani ports. The report said this shift reduced Pakistan's leverage but came at an economic cost for Afghanistan. Higher transport and logistics costs are passed on to consumers, adding to inflationary pressure. Dawn said the impact has fallen more heavily on eastern and southern Afghanistan, especially Pakhtun communities that have long depended on Pakistani goods and cross-border trade. Reduced commercial activity has also led to fewer jobs and lower household incomes on both sides of the border. The report also noted that Pakistan's bordering provinces have faced recurring unrest driven by militant violence, and that Pakistan has accused the banned Tehreek-e-Taliban Pakistan of carrying out attacks in provinces along the Afghan border after a ceasefire ended in November 2022.In summary, the report said Afghanistan-Pakistan transit trade has dropped steeply from its earlier peak, with the decline beginning before Pakistan's 2025 border closure and continuing as Kabul increasingly shifted to alternative routes. With PTI Inputs- EndsPublished By: India Today Web Desk Published On: Jul 19, 2026 15:50 IST